Sorting car tax can be complicated at the best of times, so understanding what taxes apply to company cars and who is responsible for paying them can be a real challenge.
The term ‘car tax’, also commonly referred to as ‘road tax’, refers to VED (Vehicle Excise Duty). Put simply, company cars that are exclusively driven for businesses purposes are exempt from car tax. However, company cars that are also used for private mileage can be subject to tax.
That’s why this blog will explain how taxing company cars works, addressing:
Who is required to contribute.
What standards must be met for exemption (both for employers and employees).
How to calculate company car tax.
Fleet tax schemes fleet operators could use to save money.
How does company car tax work?
Whom pays the tax on a company vehicle depends on its usage. If a company vehicle is used for personal use as well as business use, then the taxing responsibility falls on the employee as well as the employer. This is because the permission from the company to use the vehicle privately makes the vehicle a benefit-in-kind, and it should be taxed as such.
If a company car is not used privately, it is not required to be taxed by either party. If this is the avenue you wish to pursue, you will need a written company car policy stating company vehicles aren’t to be used for private use to back up any claims. It can be a difficult to prove that a company car is not available for private usage.
Company car no private use
It’s important first to understand that ‘private use’ for company cars does include using the vehicle to get to and from work, unless travelling to a temporary place of work. If you or employees are using company vehicles for the work commute, this qualifies the vehicle as a benefit in kind and will need taxing as such.
If a company vehicle is not being used for any private use, there are steps you can take to ensure it is clear that the company vehicles don’t require taxing:
Store the vehicle and/or the keys on business premises.
Ensure employment contracts ban private use and have a company car policy written.
Keep a mileage log.
Insure the car for business use.
With these considerations in mind, we’ll now take a look at company fuel benefit and how to work out what tax is owed on a company car that is used full time.
Company car fuel benefit
If you use a company car full time which is paid for by your employer, you are required to pay the company car fuel benefit.
To work out company car fuel benefit, you need to take your BIK percentage and multiply it by the fuel charge multiplier. As of the 2022 tax year, the fuel charge multiplier is £25,300.
If you’re looking to save money on your fleets fuel expenditure, you can browse our range of fuel cards here to find a fuel card that fits your fleets needs.
How much company car tax will I pay?
There are a number of factors that influence how much company car tax you pay including:
How often you have the vehicle.
What type of fuel the vehicle uses.
The amount you pay towards the cost of the vehicle.
Company car tax on electric vehicles
For the 22/23 tax year, the tax rate on fully electric zero emission vehicles is 2%, and this rate increases for vehicles as their emissions increase and, for hybrid vehicles, as their electric mileage capacity decreases.
How to calculate company car tax
To work out how much tax is owed on a company car, you’ll first need to multiply the cars P11D value by the percentage banding the car sits in.
The P11D value of a car can be calculated by taking the list price including any optional extras, VAT, and delivery charges, and removing the cost of the first year registration fee and the annual VED car tax.
Once you have this figure, you multiply it by the percentage BIK band of the car which is determined by its emissions. You can find your vehicles BIK band here.
This number is then multiplied by your income tax band.
If you’re looking to save money on your fleets fuel expenditure, you can browse our range of fuel cards here to find a fuel card that fits your fleets needs.
How to reduce company car tax
Our tips for reducing company car tax include:
Contribute up to £5,000 towards the cost of the company car to reduce the taxable value.
Pay the full cost of any private fuel to avoid private fuel tax.
Car tax for both personal and company vehicles runs out when it is no longer paid for. If you set up a standing order on personal car tax, for example, so long as your standing order payment goes through you are taxed and covered.
For company vehicles and fleets, fleet managers can benefit from the DVLA fleet scheme to help manage the cycle of tax payments on company vehicles.
DVLA fleet scheme
The DVLA fleet scheme offers help to companies with fleets of 50 or more vehicles, in order to alleviate some of the administrative burdens of maintaining larger numbers of vehicles.
The scheme offers a range of benefits including bulk taxing. This allows companies to tax vehicles in one transaction rather than individually. Once registered for the scheme, you can apply to use the Post Office Licensing scheme and the Bulk Electronic Relicensing Transaction, both of which can help you track and tax your company fleet each month with one simple transaction.
At Fuel Card Services, we aren’t able to manage your company car tax for you. However, we do offer a MileageCount service, as well as advanced telematics tracking, that can help you get a clear and accurate picture of the business mileage your drivers are conducting.
Having this understanding of exactly how many miles are being driven for business purposes can help you make your reporting more effective; making filing for tax easier and creating opportunities for you to optimise your driver’s routes to save money. Browse our fleet services.
Cars are the most common type of vehicle used by commercial fleets in the UK, and these can be owned either by a business, or owned by an employee and registered for commercial use.
Naturally, there are many considerations to be made around bringing the right fleet cars on board and creating the right infrastructure to facilitate a productive and hassle-free experience for your drivers that doesn’t break the brand.
Short-term considerations around the business’ bottom line, though, are not the only consideration to be made when picking your fleet cars. In fact, the legislative and ethical considerations surrounding the UK’s commitment to achieving net zero carbon emissions by 2050 should also play a role in how you design your commercial fleet.
For example, the UK is set to introduce a Zero Emission Vehicle mandate for car manufacturers in 2024 which will impact the types of cars that are on the market in the coming years. So, how do you go about bringing the right fleet cars on board?
Things to consider when choosing a fleet car
There are a number of factors to consider when procuring fleet cars for your company, and these factors will influence what make and model you choose to buy or lease, and which additional features are useful too.
Carry out some research following our guide below to help you pick the perfect fleet cars and other fleet vehicles for your fleets needs.
Usage and route planning
Understanding the types of journeys and routes the fleet car will need to do is the vital first step in picking the right vehicle. You’ll want your fleet car to be fit for purpose, so think about exactly what sort of trips it’s going to be making.
Long motorway trips, inner-city driving, country roads and off roading (perhaps for rural deliveries) may all require different vehicle capabilities, and this should be in the forefront of your mind when looking at car specifications and features. Powering your fleets is also crucial, and access to filling stations and electric charging stations can help determine whether you ought to invest in diesel, petrol, electric or hybrid vehicles – and whether you should look for features like stop-start technology to help increase efficiency and save costs.
Having an unsuitable car for the fleet’s needs can result in increased costs for the company, either through excessive fuel consumption or maintenance costs. You might find that cars ill-suited to motorway driving consume excessive amounts of fuel, or costly wear and tear, for example.
Similarly, consider the possible trajectory of environmental legislation as well as your business’ responsibility that might impact your fleet in coming years. For instance, if an electric vehicle offers many of the same benefits as a petrol or diesel car, consider choosing it over the latter in order to bolster your business’ efforts to minimise emissions.
Operational costs
The full scope of the cost of your fleet cars is not captured within its price tag. Instead, operational costs, maintenance, fuel, leasing, and tax must be considered to help you make an informed decision.
When looking at used cars in particular, it’s important to identify any faults or weakness that could incur future costs – and to develop a process for thoroughly inspecting second hand cars to spot any potential issues.
Repairs and maintenance
Maintenance is a cost that could end up high if you don’t do sufficient prior research, particularly when purchasing or leasing second hand fleet cars. We suggest conducting proper research by calculating projections around the real cost of the vehicles you’re interested in and gauging how expensive they’ll be within six months, a year, five years, and ten years based on vehicle makes, models, and ages.
Utilising a fleet vehicle maintenance software can also help you to stay in control and on top of maintenance needs for your fleet.
Safety
Safety is a huge factor when consider when picking your fleet vehicles but it’s also an important consideration when they’re on the road too. For this reason, its worth considering investing in fleet management technologies that will help to boost the safety of your fleet.
Tele-Gence is an advanced telematics service that is designed to improve driver safety and reduces costs too, with the use of the best market technology. Not only is it easy to use, but it’s also flexible and fully customisable so you can ensure that once you have picked the right fleet cars, you have a functional and tailored telematics service that fits the bill.
Business standards
After safety and other important decisions that influence driver safety and compatibility with the role your fleet car needs to play, you should consider your business standards and the image your want your fleet to communicate.
Company image is important, so by selecting your fleet cars and other vehicles to reflect your business appropriately you could help to unify this image. Factors to consider include branding and business objectives, as well as the value that standardisation could bring to your business if appearances matter.
Used fleet cars – the pros and cons
Used fleet cars can be a source of saving in many ways because of their age. This also applies to insurance rates, which are often lower for used vehicles and you can still find relatively new models for significantly less money than you would purchasing them new.
However, second hand cars are typically less reliable than their brand-new counterparts, and balancing base costs for the initial vehicle purchase against long-term maintenance and repair costs is key for fleet operators. You may find that a used car delivers unforeseen costs in maintenance, repair, and adjustments that a new vehicle simply might not.
If you opt for used fleet vehicles then take your time to research the vehicle value, have it inspected by a mechanic, check its VIN and history report as well as asking for warranties – and conduct a test-drive if possible.
Supply chain issues in the car production pipeline are currently having a harsh impact on second hand vehicles, pushing up prices while new vehicles are at reduced rated of production. Keep this in mind whilst looking of your second-hand fleet vehicles and be mindful that the price you pay for a fleet vehicle currently might not be reflective of its value.
Purchasing or leasing a new fleet car can be a great way to avoid the typical used car challenges around longevity and maintenance – in favour of reliability. With access to better fuel economy, you may even find that the overall cost of your new vehicle is cheaper than a second-hand counterpart when forecasting over a number of years. Not to mention the peace of mind you may also enjoy from knowing that your vehicle doesn’t have a murky past.
The pitfall of a new vehicle, of course, is the upfront cost you are likely to pay. New cars are fundamentally more expensive and on top of the immediate cost there are additional fees to pay such as registration and auto sales tax.
With car production currently being affected by semiconductor chip shortage prompted by the coronavirus pandemic and the recent fire in a Japanese factory, now is tricky time to look at purchasing new cars. Delays in the car production pipeline mean you need to act efficiently and consider the value and role of new cars for your fleet.
The benefits of new fleet cars
Reliable.
Up to date technologies.
Low maintenance costs.
No damage or wear.
The disadvantages of new fleet cars
Expensive – both for the car and the addition fees (registration, auto sales tax, dealer documentation).
Higher depreciation rates.
Fleet Management Services
We hope our fleet cars guide has helped make you aware of some of the key considerations to make when expanding your fleet in the modern day, as well as the legislation and market movements to look out for.
After you’ve made your vehicle choice and your fleet cars are out on the roads, make sure they operate as safely and efficiently as possible with invaluable fleet management services.
We offer a range of fleet services that can help with every aspect of fleet management from increasing safety with My Drive Safe, to tracking mileage with Mileage Count.
For operators of commercial fleets, going about managing those fleets in the right way is absolutely crucial. That’s because fleet management impacts a business’ profitability, staff, and customer base.
In this guide, we’ll cover off the key aspects of fleet management to help operators stay on top of the best practices used in industry. We’ll specifically touch on subjects including:
Fleet management involves the coordination and organisation of a business’ vehicle portfolio and drivers. This includes not only company-owned cars or vans, but also grey fleet vehicles which are owned by employees but used for work purposes.
Exactly what a fleet management model should look like differs from company to company, and can depend on the number of vehicles managed and the infrastructure and systems in place. However, there are some universal truths to effective fleet management that apply to all businesses at any given stage during their lifecycle.
Some of these key components include:
Monitoring operational cost.
Ensuring vehicle safety and compliance.
Vehicle maintenance and repair.
Employee management and training.
Managing operational efficiency and optimisation.
A good fleet manager should be able to keep a legal and safe operation running, engage and motivate workforce, and do so while making cost savings wherever possible.
The role of the fleet manager
The job of the fleet manager is to oversee both the wider strategic movements and the day-to-day operations of a business’ cars, vans, or trucks. Fleet managers have a wide range of responsibilities and so need to be versatile in their skillsets and able to dabble in everything from accountancy to strong communications and the ability to multitask.
Some of the key responsibilities of a fleet manager role include:
Controlling costs
Ensuring operating costs are kept as low as possible is a primary task of the fleet manager. This can include getting a good deal on initial purchases or rentals, as well as keeping ongoing costs down, which could be achieved through improving fuel efficiency or managing the use of services like fuel cards.
Overseeing vehicle maintenance
Keeping your fleet on the road is vital to the success of any business. This means ensuring cars and vans are regularly serviced and checked for any faults. The latest smart technology can alert you to any potential issues before they become a problem, allowing you to plan your schedule and reduce the risk of a breakdown.
Ensuring driver safety
As well as ensuring your fleet is mechanically sound, a good fleet manager should also be keeping an eye on driver behaviour. Tools like telematics systems can keep a full log of their actions, and show you if they were speeding, for instance – or if any harsh inputs have been made on the steering or brakes. This information can enable you step in with training or advice where necessary.
Tracking vehicles
It’s essential that you know where your vehicles are at all times. GPS tracking tools give you a complete picture of your current situation and let you make changes. For instance, it can show you if drivers are taking inefficient routes between jobs and therefore help better plan your operations. What’s more, it can quickly alert you to any unauthorised vehicle use or track down a stolen car.
Ensuring compliance
It’s also up to the fleet management team to ensure their vehicles are road legal and that drivers are meeting their requirements. However, this doesn’t just include keeping MOTs and insurance valid. You should also be tracking any mileage claims for expenses and tax purposes and ensuring drivers aren’t breaching working time rules. This also covers ensuring your drivers are fully licensed for the vehicles they operate. And you’re keeping a record of any issues such as penalty points.
How to improve your fleet management
The most efficient and profitable fleets are likely to be those with the best managers at the helm who can provide structure and processes that are easy to follow, while also ensuring communication with drivers is clear.
Our tips on the key areas in which most fleets could look to upgrade include:
1. Accessing real-time information
The first thing any fleet manager needs in order to work effectively is full visibility of their cars, vans, and drivers. This means having access to real-time data that can show them, at a glance, the location of each vehicle and employee, their current status, and whether they are experiencing any issues.
The most effective way of achieving this is by implementing an effective telematics system. This system connects to a vehicle’s computer and uses a range of sensors to feed data back to a central computer detailing everything a vehicle’s location and speed to driver inputs. Real-time data is also a pre-requisite to many of the solutions we’re about to cover, so if you don’t have it, you could be working with one hand tied behind your back.
2. Implementing GPS tracking
A key part of any real-time information solution will be instant details of your fleet’s locations via GPS. This can be vital if you need to dispatch an employee to a certain destination, as you can see at a glance who is available and best-positioned to respond.
However, it can also be used to help record mileage and hours spent on the road, divert drivers away from areas of congestion and even provide customers with real-time updates on when they can expect your employees to arrive.
3. Improving route planning
GPS tools can also be used in combination with other tech solutions to improve your firms’ route planning. This isn’t just about finding the shortest way from A to B. It should also take into account factors such as expected fuel consumption along the route and the distance to the cheapest filling stations.
For example, if a vehicle is spending a lot of time stuck in traffic with the engine idling, this results in greater fuel consumption and higher costs. With good route planning tools, this can be avoided.
4. Monitoring driver behaviour
Being able to keep an eye on how your employees are driving is also essential. First and foremost, this improves safety. If fleet telematics data shows frequent speeding, or sensors detect harsh control inputs, you can step in to address this. You can even generate league tables that show your best and worst-performing drivers, highlighting who you need to speak to most urgently.
This can also help reduce fuel consumption. By monitoring inputs such as acceleration and braking, you can educate employees to drive more smoothly as well as safely. Indeed, almost half of businesses (49 per cent) using telematics have seen a reduction in speeding incidences and fines, while 55 per cent experienced a drop in fuel usage.
5. Reducing your fuel costs
While better route planning and driver monitoring can help improve your fuel consumption, you should also make sure you’re not paying over the odds at the pump. To do this, it pays to have a suitable fuel card for your usage.
There are a wide range of products to choose from, so it’s important to get this right. It may be the case that the cheapest option isn’t very convenient for your firm. You also need to consider whether you’d benefit from cards with wider motorway networks, for example, and which brands have locations nearest your most common routes.
6. Predictively scheduling maintenance
Breakdowns can be a major headache for fleet managers. Beyond the direct costs associated with fixing vehicle problems, having vehicles off the road unexpectedly also hurts the firm’s productivity. You can avoid this by using the data taken from telematics systems to predictively schedule maintenance. These tools can highlight potential issues and allow you to step in before they turn into serious problems.
7. Automating your expenses
Admin work is often among the most time-consuming parts of a fleet manager’s job. Working out details such as mileage claims, expenses, fuel MPG and other details are essential but tedious activities. But with the right fleet management systems, this doesn’t have to be the case.
Being able to calculate these figures automatically, based on data recorded by the telematics system, doesn’t just free up your time. It also ensures the data is accurate and can highlight any unusual events – such as vehicles doing significantly more miles than expected – for investigation.
8. Setting up security alerts
Spotting and cracking down on unauthorised vehicle usage is also essential. For example, you can set up alerts that let you know if a vehicle is being used outside normal office hours. You can also establish geofencing to warn you if a car from your portfolio travels beyond a certain area.
This isn’t only useful for identifying any employees using company assets for personal use, but it can also help you quickly track down any stolen vehicles – using GPS tracking to guide police precisely.
9. Tackling fuel fraud
Another major concern for many fleet managers is the risk of fuel fraud, such as employees filling personal vehicles using a company fuel card or making claims for miles they haven’t done. Telematics can help spot issues with expenses, while a good fuel card can also help by ensuring vehicle locations match fuel card usage, for example.
10. Managing your vehicle inventory
A good fleet management system can also help keep track of your vehicle inventory. This allows you to better plan ahead for replacements, get alerts when services or MOTs are due, and prepare your finances.
You can also see at a glance details such as the types of fuel used, which will be important to know when selecting a fuel card, and can factor into future buying decisions. For instance, if the majority of your fleet is petrol-powered, you may want to consider phasing out any remaining diesels to simplify your operations.
11. Procuring the right fleet vehicles
It’s crucial that your vehicle portfolio is properly equipped to meet the needs of your business, and there are a lot of considerations you could make around whether to bring new vehicles on board, or upgrade existing cars and vans. A good starting point is to analyse the fuel they’re currently using, and gain visibility over all car running costs.
From there, you can factor in market movements such as the growth of electric vehicles when making judgements on how to go about upgrading your fleet over the coming months and years.
Fleet management software solutions
Many of the efficiencies fleet operators can look to make stem from using the latest and greatest technology in market to automate, track and calculate ways to improve performance.
To recap some of the key pieces of commercial fleet technology we’ve mentioned in this article, the essential software includes:
A thorough telematics system, such as our Tele-Gence service – which can help businesses take control of vehicle management.
Fleet software for automating vehicle checks. This can be done through our My Drive Safe mobile app service.
Software to cheapen maintenance costs. The team at Fuel Card Services can help fleet operators get access to pre-negotiated maintenance rates at thousands of garages across the UK.
Software to help drivers with their daily operations. For example, our My Drivers Club app can help drivers find their nearest fuel pumps with ease.
Having a good technology stack behind a fleet operation can also prove an attractive prospect for new drivers and partners, who may be accustomed to enjoying these benefits when offered by rival businesses.
Why is fleet management important?
In this article, we have covered what fleet management is, an overview of the fleet manager role, and helpful software solutions, but what is likely to be the impact of upgrading your fleet management processes today?
Some real-world benefits you could see within your fleet include:
Improved employee productivity.
A reduction in fuel costs – which could have a significant impact on your bottom line.
Saving time by controlling your fleet online and eliminating administrative tasks.
Reduced mileage claims.
Automated reporting dashboards.
Improved driver safety and security.
If you want to know more about how Fuel Card Services could help you and your business, you can get in contact with our fleet management experts today.
UK Fuel plays a major role in the economy. It’s a core component of the transport sector, which saw 176 billion tonne-kilometres of domestic freight transported in 2020. A whopping 77% of that freight was moved by road, and is the product of operations conducted by businesses of all shapes and sizes – from large multinational corporations to SMEs that are just starting out on their journeys with commercial freight.
All of these freight businesses, and even transport businesses such as taxi ranks, share at least one trait in common, which is a dependency on fuel. Consequently, it’s important to understand:
What is fuel?
What type of fuel your business should be investing in.
How you can save money on fuel costs.
What infrastructure is needed to source fuel consistently.
This is what we’ll cover in this guide, as we dive into all things fuel.
What is fuel?
Firstly, then, what do we mean by ‘fuel?’ Well, fuel is quite simply a material burned by a vehicle engine for power. Better quality, cleaner fuels such as bio fuel may enable cars to run a little more efficiently, travelling that bit further than cheaper fuel counterparts, but these typically come with a higher price tag attached.
So, navigating the fuel landscape and determining which types of fuel to purchase could have a massive impact on your business’s bottom line. For example, would it be smarter to invest in diesel-powered company cars than petrol alternatives? Or is electric the way forward?
To help make a decision, let’s break down the different types of fuel.
Types of fuel
The main types of fuel utilised by UK fleets are:
Unleaded petrol
Unleaded petrol is the most common type of fuel you’ll find powering vehicles in the UK, and in the wider western hemisphere. It’s most commonly available in three main variants:
Unleaded petrol – the standard petroleum variant available at virtually all petrol stations. Including E5, E10 options.
Super unleaded petrol – a higher octane version of petrol that’s typically slightly more expensive but equally more efficient.
Liquified petroleum gas (LPG) – made from propane and butane, LPG is available at the majority of petrol stations in the UK. It’s more environmentally friendly, quieter, and cheaper than petrol, and despite being slightly less fuel efficient per gallon, it could yield substantial cost savings. However, a converter is needed for regular cars to be able to run on LPG.
Modern petrol variants are a drastic improvement upon the older lead-based petrol that was a staple of fuel stations, and they present a range of options for powering company cars and fleet vehicles.
How much is petrol per litre?
The current average price of petrol in the UK is £1.47 per litre, according to the RAC. This price can fluctuate daily based on your location and the petrol station you choose, but it reflects the current national average.
How many miles per litre of petrol?
The miles you can achieve per litre of petrol (MPL) can vary widely depending on factors such as vehicle type, driving conditions, and habits. With our mileage counter, you can track how many miles your fleet vehicles cover in a typical day, along with other valuable insights.
Diesel
Also worth mentioning is diesel, which is widely known as being more fuel efficient than petrol. That’s because diesel is comprised of more long-chain hydrocarbons than petrol, meaning it’s packed with energy – which works at around 15% more energy per litre.
Fuel economy is crucial to the success of commercial fleets, and so diesel could be considered an attractive option for vehicles transporting freight at high speeds over long distances – especially due to the extra torque drivers can feel from a diesel engine.
That said, there have been concerns shared around the potential dangers that diesel fumes could pose to drivers, which some suppliers have disputed, but either way it’s worth looking into diesel as an efficient, if a little expensive, fuel source for commercial vehicles.
Diesel fuel prices
As of August 2024, the average price of diesel in the UK stands at 152.79p per litre, according to the latest figures from the RAC. However, this price can fluctuate daily due to various industry-related events.
How many miles per litre of diesel?
The distance you can travel on a litre of diesel varies depending on the vehicle type, driving conditions, and habits. On average, diesel cars travel 43 miles per gallon.
Electricity
However, there’s a new type of fuel that’s sweeping the UK market. That’s electric power – which can be generated either via public charging stations, or standalone charging points that are installed either at fleet depos or even residential houses.
There are some obvious and attractive benefits to electrifying a commercial fleet, including:
That electricity is the cheapest type of fuel you can find in the market. The government’s advisory fuel rates suggest that electricity costs around five pence per mile, compared to upward of twelve pence for petrol and diesel engines (which varies based on engine size and the likes).
Sustainability – electricity can be generated via renewable sources, and is consequently less damaging for the environment than mining and burning petroleum. As an SME in the UK, you may also do well to consider how fuel legislation could penalise the use of non-renewable fuel sources moving forward, and forecast as to how this may impact your fleet’s bottom line before making a decision about which fuel to use.
How can you avoid wasting fuel?
Regular maintenance and efficient operations
Maintaining vehicles and equipment regularly is essential for fuel efficiency. Routine checks, timely repairs, and ensuring vehicles are in optimal condition can prevent fuel waste. Efficient route planning, using tools to optimise delivery routes, and avoiding traffic congestion further reduce fuel consumption.
Which driving technique can save fuel
Encouraging smooth driving habits and minimising idling can significantly reduce fuel consumption. Investing in telematics systems to monitor driving behaviour and fuel management systems to track usage provides valuable data to identify inefficiencies. Upgrading to fuel-efficient vehicles or machinery and exploring alternative fuels can also contribute to reduced fuel consumption.
Load optimisation and employee engagement
Optimising cargo loads and reducing excess weight in vehicles are simple yet effective ways to conserve fuel. Setting clear fuel efficiency targets, monitoring progress, and involving employees through training and incentive programs can foster a culture of energy-conscious behaviour across the organisation.
Alternative strategies and monitoring
Consolidating trips, promoting carpooling, and exploring alternative transportation methods help reduce overall fuel usage. Monitoring fuel purchases, keeping detailed records, and negotiating better rates with suppliers can lead to cost savings and more efficient fuel management. These combined efforts can help SMEs reduce fuel consumption and lower operational costs.
Fuel additives are chemical compounds added to fuel to enhance its performance, efficiency, and longevity.
They serve various purposes, such as improving combustion, cleaning engine components, reducing emissions, and preventing fuel degradation.
Common types of fuel additives include detergents that keep fuel injectors clean, lubricants that reduce wear on engine parts, and stabilisers that prevent fuel from breaking down over time.
While some additives are included in fuel by manufacturers, others can be purchased separately and added by consumers to address specific issues or optimise engine performance.
Which type of fuel should I use for UK company cars and fleets?
So, which fuel type should you choose for your commercial fleet? See below for a fuel comparison.
It’s a difficult question to answer, however there are a few key elements to this formula that apply to the vast majority of fleets. You could proceed by:
Identifying the fuel demands of your fleet. This is made easier by planning your routes in advance and creating accurate forecasts about how much fuel you’ll need during the upcoming months.
Factoring in your current fleet capacity. If you’re using a fleet that comprises solely diesel HGVs at present, then you have to conduct a cost-benefit analysis when considering a move over to electric or petrol equivalents. There’s the up-front cost of new vehicles to consider, as well as ongoing costs – and your ability to reliably source fuel from petrol stations based on your planned routes.
Calculating the cost of fuel for your fleet. Comparing all the options available to you based on your routes, mapping out petrol station availability, and choosing a fuel card that specifically benefits your fleet by giving drivers access to cheaper fuel prices.
Thinking about longevity. The government plans to ban the sale of new petrol and diesel cars as of 2030, and so it feels the transition toward electric fleets and roads is an inevitability that businesses in the UK must embrace.
There could be cost-saving advantages for fleets that are willing to electrify and embrace sustainability with a positive and open mindset. This is partly due to the government grants and subsidiaries available for SMEs that invest in low-emission plug-in vehicles, and partly due to the operational advantages of building an electric infrastructure gradually – which enables companies to start taking orders as soon as EVs are purchased.
For example, it’s worth considering the time required to install EV charging points. With this technology already proving fairly affordable for fleets, it may be wise for SMEs to set up charging stations within depos in the near future. This may mean that any EVs purchased later down the line, when the tech becomes cheaper and more available, can be utilised quickly – while avoiding premiums for charging point installation that may come about as competitors rush to electrify.
Additionally, showcasing your business’ openness to and use of electric power could help you build strong relationships and with customers and suppliers who share those same sustainable brand principles – or unlock new partnership opportunities.
Fuel pump near me
Our Fuel Card Services Pump Locator is a tool designed to help users find the nearest fuel stations that accept their fuel cards, making it easier to manage and control fuel expenses. By using this online locator, businesses and drivers can quickly identify nearby stations, ensuring they can refuel conveniently and take advantage of their fuel card benefits, such as discounts or streamlined payments. This service is particularly useful for fleet managers and drivers who need to plan routes efficiently and minimise downtime.
How can business fuel cards help?
At Fuel Card Services, we specialise in helping businesses save money on their fuel costs. We do this in a number of ways, from offering a range of branded UK fuel cards that can make a real impact on your bottom line for every mile driven by your team, to offering an advanced suite of fleet services that are designed to help your vehicles and operations run more efficiently.
For example, our MileageCount software and advanced telematics service can be used to properly track your driver’s routes, and plan routes efficiently – which is a prerequisite to calculating the fuel demands of your fleet. Additionally, our fuel cards can get you access to virtually any type of unleaded or diesel fuel at almost any pump across the UK – all you need to do is identify the right fuel card for you – which our experts can support with.
If you think your fleet could benefit from our cards and services, get in touch today and see how we can help you.
It’s a question that car buyers have been asking for years: should I opt for a petrol or diesel vehicle? This is a decision that’s especially important to fleet buyers looking to keep costs low and economy high.
Of course, in today’s environment, it’s no longer an either-or choice. There are also a range of cars available that use electric power to some extent. This is only set to grow in the coming years.
However, for now, let’s focus on the more traditional options to determine which will be better for you.
Is diesel falling from favour?
The popularity of diesel vehicles has risen and fallen over the years. In the early days, they had a reputation as smoky, smelly and slow cars that sounded more like farm equipment. But this perception has altered as technology has improved and diesels have closed the gap with petrol.
The potential cost savings you could enjoy thanks to their greater fuel efficiency then led to a surge in demand. However, recent developments like the 2015 VW emissions scandal have again tainted some people’s perception of diesel.
In 2016, the number of petrol and diesel cars sold in the UK were almost identical. Some 49 per cent of sales were petrol and 47.8 per cent diesel, with electric accounting for around three per cent.
Since then, however, the popularity of diesel has fallen significantly. In 2020, just one in four new cars registered was a diesel, compared with 63.5 per cent petrol and almost 11 per cent electric. So, does this mean diesel’s time has passed? Far from it.
The pros and cons of petrol and diesel cars
There are still several good reasons to invest in diesel vehicles. Greater fuel efficiency is still a major benefit. These cars typically use around 15-20 per cent less fuel than petrol cars. This means lower running costs, which can offset higher initial purchase and fuel prices.
However, petrol remains cheaper than diesel. What’s more, while diesels have historically kept their resale value more than petrol, this is changing in response to shifting buyer demands and new regulations.
When it comes to the environmental factors, things are a little more complicated. In terms of carbon emissions, diesel-powered cars produce less CO2 than petrol. But while this is often used as the primary indicator of a car’s eco-friendliness, there are other factors.
For instance, diesels produce more nitrogen oxide than petrol, which also contributes to climate change. However, this can vary from vehicle to vehicle. Which?, for instance, found some diesels produce less NO2 than some petrol cars. Therefore, if your green credentials are a factor, it pays to do your research.
Cost considerations
One of the main deciding factors will be the running costs of your car. This typically means looking at fuel consumption. As noted above, diesel engines tend to be more economical than petrol – but does this offset the higher cost of fuel per litre?
The answer is that it depends on how much you use your car. Generally speaking, the more miles you do, the cheaper a diesel engine becomes in the long run. According to Which?, it can take between six and 11 years to recoup the extra fuel and purchase costs of a diesel. If you do very high mileage, however, you could start saving money faster.
But the cost of fuel is not the only consideration you’ll have to make when choosing between petrol or diesel. The type of engine you’ve got also factors into your car tax obligations.
For older cars, tax bands are based on emissions, so if you’re buying second-hand, a diesel could prove cheaper. However, for those registered since April 2017, only the first year’s ownership is taxed this way, with a standard rate applying afterward. This could greatly reduce any tax savings you may expect to make on a diesel.
Should I buy petrol or diesel cars for my fleet?
As well as fuel usage, there are other factors related to how you use your vehicle that may impact your choice. How and where you drive also makes a difference.
For example, diesel engines generally take longer to warm up than petrol engines. Therefore, if you’re doing a lot of short trips around town, petrol may be a more economical option.
On the other hand, some drivers prefer the improved low-torque performance of a diesel. Driven sensibly, a diesel will use less rpm and need fewer gear changes than a petrol engine. They also offer more pulling power, making them handy if you’re going to be towing a trailer.
You may also need to think about whether you’ll be driving in low emission zones. London already has an ultra-low emission zone for cars, and several other cities are set to follow suit in the coming years.
If you have older diesel vehicles – especially those that don’t meet Euro 6 emissions standards – you could therefore end up paying a lot of money to drive in these areas.
What about electric options?
While petrol or diesel is still the main choice for many buyers, you may want to look to the future. In this case, you’ll have to consider whether a full electric or hybrid car will be worthwhile. Indeed, with the government going ahead with plans to ensure all new cars sold are electric by 2030, this will become a necessity in the coming years.
Conventional hybrid – A combustion engine supported by an electric motor. The electric motor does not need plugging in, and is charged as the car moves, usually by recovering energy from the braking system.
Plug-in hybrid (PHEV) – A combustion engine supported by an electric motor, which can be charged via an external power source. The electric motor is typically used at lower speeds, with the petrol or diesel engine taking over when more power is required.
Full electric – No petrol motor at all.
When compared to petrol or diesel cars, the main advantages are much lower emissions and reduced fuel costs.
Each has its pros and cons. A conventional hybrid is the cheapest and least complex, but can only use a limited amount of electric power. This means you don’t see as many cost savings as a PHEV or full electric.
For fully electric cars, you would also have to factor in range. Battery technology is improving all the time, with some cars now able to go hundreds of miles per charge, but the charging infrastructure still has some way to go.
As you can’t simply pull into a fuel station and fill up in five minutes, more careful route planning may be required for long journeys. However, for shorter trips where you can recharge regularly, this shouldn’t be an issue.
Choosing the best engine type for your fleet can save you huge amounts of money in the long run, especially when combined with the right fuel card. Contact our experts today to find out which would be best-suited to your needs.
